In this morning's Post, Galbraith has a good piece on Pakistan.  I think he pretty much nails it on the head, though I don't think things are quite as bad as they seem.

I was in Pakistan in mid-November (Balochistan and Karachi) during the state of emergency. Bhutto had returned the week before my trip and the first attempt to kill her in Karachi resulted in 150 dead. 

When I was in Karachi shortly thereafter, I was struck at how normal things seemed.  In talking with my local counterparts, many of them expressed a high degree of indifference.  For all his failings, Musharraf has done some good things economically and in education.  At least among the professional types (hardly a representative sample) I was dealing with that seemed to give them pause about taking to the streets.

I guess my point is that things may not be quite as dire as they seem.  Or more cynically, things can get a lot worse.

PS: For anyone interested in seeing a pretty remote part of Pakistan (Balochistan), here is a youtube video my colleague took from our trip.  

Krugman has a piece on free trade today that basically hits the nail on the head on free trade, but fails to offer a remedy.  Since we've had some pretty heated discussions about trade and its impact on Vermont, I thought I'd pass it on. 

No, I am not referring to money.  

The Next Billion (http://www.nextbillion.net/) refers to the effort to lift a billion people out of poverty over the next 20 years.  The idea comes out of the notion that over the last 20 years approximately 500 million people around the world have been lifted out of poverty.  That sounds great til you remember that that number still leaves about 4 billion people living on $3/day or less.

The Next Billion concept comes out of some thinking at the World Resources Institute (www.wri.org).

Basically, the idea of people involved in the NextBillion effort is to use market ideas, technology and knowledge of international development practice to eradicate poverty by reaching the “next billion” on the income scale and helping them rise out of poverty.

I raise this because I want to remind GMDers that economic growth is not only about big corporations destroying the world and a big box store on every corner. It is about empowering people to improve their lives and maybe move up from $3 dollars a day to $10 dollars a day.  A modest improvement, but one that can have profoundly positive impacts on health, nutrition, education and child welfare.

We need to remember that growth isn’t just about us living in Vermont, it is about the 67% of the world’s population  that lives on a daily wage that won’t even pay for a latte at a coffee shop.  It is about empowering men and women to build a better future for themselves.

Vermont Tiger posted an editorial from the St Albans Messenger on the importance of growth.  The editorial is not perfect: Douglas gets off too lightly and the proposed solutions are half-measures.

However, there is a paragraph I like:

Those in the middle understand – or will accept – the basics. Growth is essential. Without it, you wither away to nothing. Growth cannot be legislated, like cultivating a virus in a Petri dish, the proper ingredients must be in place. We cannot slap a protectionist attitude around our borders [in Vermont, or as a nation] to keep what we have here alive. There is also the understanding that preaching doom is a self-fulfilling prophecy, here and beyond our borders. It is also beyond the pale to expect that sizeable chunks of our job market will be taken care of by large corporations interested in Vermont as a place to do business. We don’t have the space, the infrastructure or the labor market.

Doug Hoffer has proposed the idea of self-reliance.  Self-reliance has some admirable attributes.  Buy more locally.  It is important to remember that Vermont is not operating in autarky- we cannot throw up protectionist barriers.  Thus, unless Vermont goods and services are either demonstrably cheaper or better, there will be limits to how far the buy local thing can go.  As mydog has pointed out, buying local is essentially a marketing tactic.        

Similarly, promoting pension funds to invest more locally is not a bad thing, but it will likely do little to stimulate job or wage growth.  Why?  Because pension funds will not be investing significant money in either start-ups or new industries.  Why?  Because of risk.  Instead, the money will likely be channeled to existing businesses (and government bonds).  Not a bad thing, but not something that is going to generate a lot of new higher paying jobs.

Energy efficiency is also a prime facie good, but it is not likely to stimulate a lot of new jobs simply because consumers will not all channel their savings into buying local.  As has been pointed out, it may stimulate a bit of growth in the construction industry, but that impact will be pretty limited.

In the private sector, wages are a function of the underlying value of economic activity.  There is a a reason why Ben and Jerry’s can afford to pay a living wage – look at the margins it gets per pint!  Premium ice cream is clearly a high margin business so it is easy for the company to pay good wages.

If, on the other hand, people are engaged in low-value, low-margin economic activity (tourism, retail, etc), all the screaming in the world about a livable wage will do little.  Why?  Because increasing an employees pay has to come from one of three sources: increased revenue/productivity, increased prices (bad for competitiveness) or decreased rates of return for the owner.  Now, you may say that fat cat business owners should take a reduced rate of return.  Fair enough.  But keep in mind, at a certain point decreased rates of return will deter investment in new jobs because risk and return must be balanced or people will invest in other areas.                                                                                                                                                                                                                                                                        

The best way to get Vermonters a livable wage is to increase productivity by getting them out of low-value, low-margin economic activities and getting them into high-margin, high-value areas.  The only way to do that is foster in an economic environment that creates those jobs.          

If you want people to be able to buy more locally, if you want people to earn better wages, then you need to accept the fact that growth is the only way forward.  A self-reliance strategy on its own is highly unlikely to yield the kind of growth needed to maintain Vermont’s way of life, let alone improve it.

If you are willing to accept the idea that economic growth is the most effective way to provide livable wages and support for local goods and services, then you need to be open to the idea that Vermont needs to develop and specialize in those areas where it has a comparative advantage, both nationally and globally.  I have offered up my ideas in this regard (a green economic zone), but would like to hear other people’s thoughts.

Let me conclude by stating clearly that elements of a self-reliance approach and a high growth strategy are not mutually exclusive.  Buy local, invest local, livable wages can co-exist with a growth-based economic strategy.

I picked this link off of TPM.  If the allegations are true  – this is simply disgusting and a travesty.  

http://abcnews.go.com/Blotter/…

Let me say first that I am a big fan of Richardson.  He is a fellow Fletcher alumnus (spoke at my graduation), has a sterling resume and is a deal-making SOB (this is high praise in my book).  

The problem is that he is a bit undisciplined on the stump.  He  says things like this.  Ugh.  Again, he is a great guy and would make a very good president, but I worry that he doesn't have the discipline on the campaign trail to fend off the right wing attack machine.   

I've been criticized for focusing on the campaign and not just the candidate.   I switched from Tsongas to Clinton in 92 (a NH voter at the time) because I felt Clinton could win even though I was a bit more comfortable with Tsongas on the issues.  I feel the same way about Richardson and Obama.  Maybe it is cynical, but I'd rather the candidate whom I agree 85% of the time and can win, than over the candidate I agree with 90% of the time, but lacks the goods on the trail. 

God bless Stephen Colbert.  He provides great comic relief to the running catastrophe we call American politics.  As many of you know, he is now putting together a campaign to run in the SC primary.  While this is obviously a joke, some are starting to see real consequences in terms of polling.

I think it would be great to have Colbert in the mix, not only as a protest vote, but as a means of bringing the candidates back to reality.  Imagine if Mike Hukabee started talking creation science in a debate with Colbert at the podium!!!  Or if HRC starts talking on Iraq… Or Guiliani on 9/11.

What would be even better is if he won a delegate or two and was allowed to speak at the conventions!

This week the House will vote on a resolution acknowledging the genocide of Armenians in 1915 in Turkey during WWI.  This resolution has been bouncing around the Congress for at least 20 years and common sense has always prevailed in preventing its passage.  Now, however, Nancy Pelosi wants to put a stick in Bush's eye and score a few points with the powerful Armenian lobby in California.

Let me state from the outset that no one condones, denies or anyway seeks to minimize the suffering of the Armenian people in 1915 at the hands of the Young Turk regime (as opposed to the present day Republic of Turkey).  The point is whether such a resolution now will yield any positive outcomes, either in Turkey or in Armenia, or for the US relationship with either country.

Let me offer a few points as to why this resolution is a bad idea:

1) US moral authority is at an all-time low.  Thus, a scolding from the Congress for crimes committed nearly a century ago is going to seem hollow and vindictive. The US has many crimes to answer for from that same period (native Americans, Phillipine occupation, Jim Crow etc), so we are not exactly in a position to preach to the Turks.

2) It will greatly complicate efforts at rapprochement between Armenia and Turkey, which still have no diplomatic relations and a closed border.  Quietly, the two countries have been trying to find a modus operandi – this resolution will set that process back significantly.  This will primarily harm the people of Armenia, who need to get that border opened for trade and cultural purposes.

3) The resolution, and the likely Turkish backlash, will be used by the French and other EU states opposed to Turkey's membership in the EU.  This, in turn, will only fuel anti-western sentiment among Turkish voters, already bitter over the US invasion of Iraq and EU foot dragging on membership talks. 

4) It could push Turkey to withdraw from NATO – ending the US's single most important alliance with a Muslim democracy.  Yes, Turkey's democracy is far from perfect, but it is lightyears ahead of any other country in the middle east (except Israel) in terms of allowing open and free debate.

5) It could induce the Turkish military to invade northern Iraq in pursuit of Kurdish separatists as a means of punishing the US.  Such a move would complicate ANY efforts for the US to get out of Iraq. 

Other than placating the Armenian diaspora lobby in the US, I really don't see any upsides to this resolution, particularly right now.  It will hurt Armenians living in Armenia and will not bring the Turks to a different position.  Over the last decade, Turkey has been slowly coming to terms with its multi-cultural heritage, but this resolution will set that cathartic process back significantly.  

I checked the NY Times this morning and guess what?  They've gotten ridden of their annoying Times Select (paid service for access to interesting articles and columns)!!!  Now I can get annoyed by Thomas Friedman again!!!

It is pretty hard for the Dems to de-fund the war for a couple of reasons: 1) the funding is currently wrapped up with a number of other pretty important initiatives, including the war in Afghanistan. 2) the President has a large degree of discretion to move budget money around to keep the war going, 3) it would allow Bush and the GOP to blame defeat on the Dems, which would give our party yet another generation of the 'vietnam'complex on national security issues. 

So what could our congressional leaders do?  The president is about to ask Congress for another $200 billion to fund the war for next year.  Getting 60, let alone 67, senators to vote for deadlines etc is not going to happen.  So, maybe what we do is engage in a series of small incremental steps (salami tactics) to keep the heat on moderate republicans until they break.  Here is what I propose:

1) Break the budget request down into 4 parts: now through December 20 (X-mas), X-mas through April (“Mission Accomplished”), April through to the month before the GOP convention, last portion covering through early October 08.  Each chunk will have to be fully debated and authorized.   This would force the war debate on to the front page at very awkward times for the GOP.

3) With each chunk of funding, Dems up the ante.  For the first, maybe we just include Webb's troop rotation provisions, for the Christmas budget we include changing the Mission of US soldiers to training, for April we push a deadline, etc…   

Rather than push a big confrontation now, which we are likely to lose, we need to look at gradually breaking down GOP unity by proposing an escalating range of restrictions on the war.  Each restriction should build on the previous gain. 

The aim of the effort would be to force moderate GOP senators – Coleman, Smith, Snowe, Sununu etc to slowly break with the president.   It would also suck the oxygen out of anything else inside the Beltway for the next year, ensuring that the MSM has plenty of fodder in the run up to '08.